“Apple Inc. shareholders haven’t had much to carp about, with the stock up 1,474% since 2003. But if there is one complaint, it’s the company’s refusal to do anything with the $20.8 billion in cash and short-term investments it has socked away. The cash just sits there, earning little more than the average savings account. ‘Our preference is to maintain a strong balance sheet in order to preserve our flexibility,’ Chief Financial Officer Peter Oppenheimer told investors earlier this year,” Peter Burrows reports for BusinessWeek.
“Apple’s about to get a lot more flexible. While it has been adding about $1 billion in cash each quarter, analysts predict the company’s hoard could surge to nearly $30 billion over the next year because of strong sales of computers, iPods, and iPhones. Apple may well pass Microsoft, which has $23.7 billion in cash. ‘[Apple] could have $40 billion in the bank [in two years],’ says analyst Gene Munster of Piper Jaffray,” Burrows reports.
MacDailyNews Take: If Microsoft keeps burning cash on stupidity such as this, this, and this, Apple won’t have to wait very long at all to pass Microsoft — a couple of weeks at most. (Disclaimer/Toast: May Steve Ballmer run Microsoft for as long as it takes!)
Burrows continues, “If Apple’s stock keeps rising, pressure from investors to do more with its cash will remain muted. Still, some experts think it makes sense for the company to make changes, given its hefty bank account. They say Apple could seek more acquisitions, probably small ones, to hasten its expansion into new businesses… Some analysts think the company should explore acquisitions in the music business, taking advantage of the major labels’ dire straits.”
More ideas about what Apple should do with their cash hoard here.